Autumn Statement: mansion tax will 'stifle investment'

Plans to increase taxes on purchases of £2m homes is stifling £250m of
investment from one the UK's leading housebuilders, according to the
managing director of Berkeley Group.

Ahead of the Autumn Statement, Rob Perrins, managing director of the London-focused housebuilder, warned the Chancellor against ceding to political pressure "to act tough on tax and clobber foreign investors".Photo: ALAMY

Ahead of the Autumn Statement, Rob Perrins, managing director of the London-focused housebuilder, warned the Chancellor against ceding to political pressure "to act tough on tax and clobber foreign investors".

"It would be a disaster for London and the wider economy," he writes in The Sunday Telegraph today.

"Property transactions are falling and investors are increasingly cautious about choosing this city as a place to live and to work."

He commented as the industry prepares for the Chancellor to reveal details of a form of "mansion tax", an annual levy on £2m-plus properties held through the corporate companies which are popular with overseas buyers. The aim is to stop people avoiding stamp duty on future sales. Mr Perrins said politicians are failing to make the connection between international investment and attempts to boost the housing supply.

He warned of a growing perception abroad "that Britain remains ambivalent about foreign investors", even though he said tax avoidance in the housing sector was "marginal".

Arguing against an annual charge, he called on the Chancellor to create a "simple, stable" tax regime for property. This would mean Berkeley could invest an extra £250m over the next 18 months, resulting in 1,000 homes and 3,500 jobs, he said.